Nonprofits Often Their Own Worst Enemy in Fundraising

A new study by CompassPoint and the Evelyn and Walter Haas Jr. Fund uncovered reasons why many nonprofits are caught up in this vicious cycle.

By Michael S. Fischer|January 22, 2013 at 06:05 AM

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American nonprofit organizations’ work is legion, but too many struggle year after year to raise funds they need to succeed.

A new study released last week by CompassPoint and the Evelyn and Walter Haas Jr. Fund uncovered reasons why many nonprofits are caught up in this vicious cycle: serious personnel deficiencies and significant organizational issues.

CompassPoint, with input from a national advisory group of fund development experts, surveyed more than 2,700 executive directors and development directors across the country. Although very diverse, the participants’ organizations all had in common a senior-level development staff position, even if that position was vacant at the time of the study.

The research effort also included 11 focus groups with executive directors, development directors and nonprofit board members.

According to the report, three main challenges face nonprofits.

Many organizations pin their fundraising hopes on the development director, yet the study found high turnover and long vacancies in this position.

Executive directors at organizations where the development director position was vacant said the posts had been open for an average of six months, and nearly half reported even longer vacancies.

Half the development directors surveyed said they expected to leave their current jobs in two years or less.

Forty percent of development directors said they were not committed to careers in development.

Related to this, nonprofits are failing to find enough qualified candidates for development director jobs. This is exacerbated by performance problems and lack of basic fundraising skills among key development staff.

More than half of participants said their most recent development director search had not produced enough candidates with the right mix of skills and experience.

One in four reported that their previous development director had been fired.

One in four executive directors said their development directors had no experience or were novice at current and prospective donor research and at securing gifts.

As well, many nonprofits and their leaders are failing to build an infrastructure to support fundraising success.

Some 25% of nonprofits surveyed had no fundraising plan in place, and 20% had no fundraising database.

Three-quarters of executive directors said board members were not doing enough to support fundraising.

More than 25% of executives identified themselves as having no competency or being a novice at fundraising.

A majority of development directors reported only little or moderate influence on key activities such as getting other staff involved in fundraising or developing organizational budgets.

“This study shows that the fundraising problems facing nonprofit organizations are more extensive and more entrenched than anyone imagined,” Jeanne Bell, CompassPoint’s chief executive and co-author of the study, said in a statement.

“As a sector, we need to elevate the importance of fund development as a leadership issue, invest in a stronger talent pool, and strengthen the ability of nonprofits to develop the systems that enable fundraising success.”

The report includes a set of steps that nonprofits and their supporters can take to break the negative fundraising cycle. CompassPoint said it would convene leaders across the country in a webinar series this spring to discuss these steps and generate new ideas to help nonprofits meet these challenges.

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